Story of the Day

Barclays fined for gold price fixing

May23

Written by:23/05/2014 09:26

The Financial Times reported today that Barclays had been fined £26 million over gold price fixing. The fine was set by UK regulators after a former trader exploited a 'weakeness' in the bank's systems to manipulate the setting of the price of gold.

The Financial Conduct Authority (FCA) said that in June 2012 former Barclays trader Daniel Plunkett had boosted his own trading book by $1.8m at the expense of a customer by placing certain orders with the intent of increasing the likelihood that the price of gold would fix below a set price. As a result, Barclays was not obligated to make a US$3.9m payment to its customer, and Plunkett's book profited by US$1.75m (excluding hedging), which was in addition to an initial profit that his book had received.

Mr Plunkett was fined £95,600 and banned from performing any function in relation to any regulated activity.

The FCA's director of enforcement Tracey McDermott said: "Barclays' failure to identify and manage the risks in its business was extremely disappointing. Plunkett's actions came the day after the publication of our LIBOR and EURIBOR action against Barclays. The investigation and outcomes in that case meant that the firm, and Plunkett, were clearly on notice of the potential for conflicts of interests around benchmarks."

See how Barclays is rated against other high street banks in our special report on ethical finance.

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